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£27m sale of Tesco Extra in Newry one of year's largest property deals

By John Mulgrew
· 13 September 2017 10:00 AM

1The Tesco store in Newy was owned by Aberdeen Standard Investments

The £27m sale of a huge Tesco Extra store in Co Down is one of the biggest commercial property deals to take place in Northern Ireland this year. The large foodstore is at Downshire Road in Newry.

The building had been owned by Aberdeen Standard Investments, and has been sold to a private investor, according to commercial property agent Savills.

The size and value of the store make it one of the biggest assets to be sold here over the last few months.

The building commands an annual rent of more than £1.5m, and current tenant Tesco has taken the property on for a 25-year lease, which began in May 2013.

Ben Turtle, investments director of selling agents Savills Northern Ireland, said: "Savills is delighted to have assisted Aberdeen Standard Investments on the sale of this dominant foodstore in Newry.

"The high-quality tenant ensured demand for this asset was strong throughout the sales process. The incoming purchaser will benefit from an attractive net initial yield and a tenant with an unexpired lease term in excess of 21 years."

Tesco remains Northern Ireland's biggest supermarket with around 35% of the grocery sale share across around 50 stores.

The sale of the property comes as Tesco has been reining in proposed store openings here.

In 2015 it reversed nearly two decades of continuous expansion in Northern Ireland as it dropped plans for two stores in Carryduff and Armagh.

The company, which has operated here since 1996, suffered a reversal of fortunes due to declining sales and an accounting mis-statement.

As a result, it abandoned plans for multi-million pound investments across the UK. with the planned stores in Carryduff and Armagh among those mothballed.

The sale comes after a Co Down investment firm, which recently bought Belfast's CastleCourt Shopping Centre, announced the £43.5m acquisition of a landmark office development in Glasgow.

Wirefox has purchased the 11-storey Capella building, which comprises more than 100,000sq ft of office space.